Making a decision to finance or develop a project should not be based on experience alone, but rather requires a specific assessment, such as the Technical Due Diligence process, Servelect officials claim.
Technical Due Diligence (TDD) is an independent, unique and unbiased evaluation method that justifies and argues from a technical point of view an investment, be it the development, financing or acquisition of an existing project.
“A TDD evaluation achieves its goals when it is conducted by third parties completely independent of both the financier and the developer. Our team of engineers and technical experts has been involved internationally in TDD analyzes of more than 1000 MWh installed in photovoltaic parks, with a total investment value of more than 800 million euros, in countries such as Italy, Spain, France, Japan , Chile, Romania, Portugal. Also, Servelect has over 18 years of experience in implementing energy efficiency projects and local energy production in the industrial, commercial and public sectors. Thus, we make available to financiers and developers of local energy production projects, specialized engineering services for Technical Due Diligence,” said Iulia Bârgăuan, Director General of the Servelect company.
From the financiers’ perspective, a Technical Due Diligence analysis will help them make informed decisions regarding the granting of financing, knowing the technical risks and their mitigation methods; to offer customized financing solutions (individual or in combination with insurance policies, etc.) and to have independent and impartial technical expertise available.
In turn, the developers of local energy production projects benefit from:
- Anticipated identification of risks related to the project (before taking the necessary steps to obtain financing);
- Identification of limitations imposed by external factors (e.g. the proximity of the chosen location to buffer zones, objectives of national interest, etc.);
- Identification of risks related to the chosen technology (e.g. known serial defects, degradation mechanisms specific to the product and/or the use of the product in the given environment, etc.);
- Increasing the trust of third parties in the developed solution, be it shareholders, financing institutions, crowdfunding or local community investments, etc.;
- External technical support;
- Independent project evaluation and transparency;
- Knowing the feasibility of the technical solution at local geo-socio-technical parameters.
Therefore, Technical Due Diligence (TDD) is a complementary assessment to legal and financial assessments of an investment that helps investors understand the technical feasibility of the project with a complete analysis of technical risks and opportunities. Such an analysis will directly influence the financial evaluation of the investment, namely its profitability, depreciation, medium and long-term earnings, the need for periodic capital injection or maintenance costs, becoming an essential component for any successful transaction.